West Valley Information
What happened to the Buyer’s market in Phoenix
By George and Cheryl | June 14, 2009
Just a few weeks ago any buyer who wanted to purchase real estate in the Phoenix valley would usually put in a discount price and ask for a list of concessions. Since the market was so distressed and so few buyers, sellers especially bank owned properties would jump on an offer. Now all of that has changed.
There has only been one of my buyers who was able to purchase a property with only one offer. All the others have found that easy pickings are not as easy and better get there first. I have one client who has put in 8 offers at or above list price. This buyer has great credit, cash for a hefty down payment and a short list of desired options. But my client is still looking for a home.
Every agent I speak with is reporting similar buying challenges.
I won’t bother to write why I think this has happened. I just want to warn prospective buyers. Get ready to work for a great deal. The sellers are watching their properties move.
Topics: Investment, Real Estate | No Comments »
Getting Started in High Return Real Estate Investing
By George and Cheryl | March 23, 2009
From my years in consulting with small businesses, I know the most important part of building any type of business is to identify your destination. Another word for this starting point is write down where you want to go and what you are willing to do to get there.
This destination must be specific and have a date attached to it. I suggest looking ahead five years. Put yourself there and write down what you see. If you are not familiar with this concept, there are a host of resources available to fill in any blanks you might have. Score, Brian Tracy, Ziglar, or any resource on writing a business plan will give you more than enough material to complete this task. One famous quote should help you with this starting point. “What the mind can conceive and believe the body can achieve.”
Put this vision in your head with reminders in key places to help your mind work out the details for you. If you believe what the movie “The Secret” describes, do what the movie suggests.
Topics: Investment, Money, Real Estate, Safety | 1 Comment »
Information about the Homeowner Affordability and Stability Plan
By azbenjamin | March 4, 2009
President Obama’s eagerly anticipated foreclosure prevention program went into effect on Wednesday. It targets 9 million borrowers for help - are you one of them?
http://finance.yahoo.com/news/Mortgage-Help-Do-you-cnnm-14543905.html
Topics: Money, Questions, Real Estate | No Comments »
Why Use Trusts?
By George and Cheryl | January 9, 2009
Estate Planning - Bypassing Probate
1. Assets held in trust are not part of an individual’s estate; therefore, those assets would not be included in probate because they are already held in trust for the benefit of another individual. If a beneficiary dies, the beneficial interest in a trust may be part of their estate; however, this would not affect the asset or the trust, unless dictated by the Declaration of Trust and Trust Agreement.
2. The best example if this is Anna Nicole Smith. This was the 20-Something model that married the 90-Something Texas oil billionaire. The billionaire left Smith several million dollars and his children contested his Will. Although the Will was modified several years prior to his death, the children contested on the grounds that the billionaire was not competent to make the change. The children said the Will was not valid and a judge agreed and entered a different judgment.
a. The Billionaire’s wishes were not honored
b. He was found incompetent after his death
c. The children were granted the majority of the estate
There are several version of what “really” happened … either way, if these assets had been placed in Trust for Smith, they would not have been part of the Billionaire’s estate and very difficult to contest. The title to any such assets would be held in trust and a Trustee would have ultimately made the decision as to the disposition of them; in accordance with the Billionaire’s wishes.
3. Probate is the publicizing of an individual’s Last Will and Testament. A Probate judge makes the Will a matter of public record in order to determine if there are any outstanding debts which should be settled prior to the disposition of the assets. In other words the Court says this; “Hey, this guy has assets. Is there anyone who has reason why this Will should not be recorded? Does this person owe you any money? Is there anyone who’d like to screw this guy?” If no one comes forward, the judge allows the heirs to have the proceeds of the Will.
4. Since assets held in trust are not part of anyone’s estate, these assets bypass probate and continue to be held in trust for the benefit of another person. The trust can hold these assets for up to 20 years, as directed by the Grantor or creator of the trust. After 20 years, a new trust would have to be created or the assets liquidated.
Privacy – Avoiding Becoming a Target
1. Since trusts are private documents created by individuals they may be kept from public view. In fact, most trust documents forbid anyone from disclosing the documents to a third party or anyone who is not a party to the trust; Trustee, Director, Beneficiary, Etc. Disclosing the documents would be a breach of contract and any disclosing party would be liable for damages.
2. The assets of a trust are likewise, private and may not be disclosed to anyone outside the trust. The members of the trust are the only individuals who know what assets the trust holds. Land, vehicles, ATVs and other items which have a “Title” can become part of the public record; however, only the “Owner” or “Title Holder” may be made public. If a Trust holds title to an asset, the name of the Trust is public, but the Declaration of Trust, the Trust Agreement, any Beneficiaries and other information about the Trust remains part of the private agreement.
3. If an individual is sued and they don’t “own” anything, it will be difficult for liability to attach to an asset. Trusts are not “Owned” by anyone. Trusts have Trustees who handle the legal affairs of the trust and its assets (Trusts can’t be liable for the actions of a Trustee). Trusts have Directors who tell the Trustee what actions to take with regard to Trust assets (Trusts are not liable for the actions of the Directors). Trusts have Beneficiaries who may have the right to receive proceeds, avails, dividends and other funds produced by the assets; however, Beneficiaries to NOT have any ownership in the asset of the Trust (Therefore, Trusts may not be held liable for the actions of a Beneficiary).
4. As beneficiary, an individual may “control” an asset without the liability of ownership. The fact that an individual is a beneficiary is private and their interest in the trust is private. An individual may control hundreds or properties without appearing on title.
Asset Protection – Avoiding Liability
1. Private Jet Crash with Signer
a. To be completed
2. Victoria A. – Lost properties due to fire at property
a. To be completed
3. John R. – Charlotte, NC
a. Imagine you leave for the weekend and a well-deserved vacation. When you return, through no fault of your own, you are embroiled in what you think is a baseless lawsuit? You have insurance, right? Of course you do. The problem is your insurance doesn’t cover All Terrain Vehicles and that is what your neighbor borrowed while you were out of town.
John R. is a Realtor and investor from Charlotte, NC. Last year John became the victim of our litigious society and is realizing the difficulties faced by someone with large assets. John carries a large “Umbrella Insurance Policy” in hopes that no judgment will exceed $5 Million. He’s covered at home, work, the car and everywhere he travels. His home is covered. His rental properties are covered; however, his 4WD ATV is expressly NOT covered by his liability policy and that is what his neighbor was riding when he struck a tree and was paralyzed from the waist down.
John left for Myrtle Beach, SC on Friday May 26, 2006. The neighbor, and friend, agreed to watch the house and feed the dogs. John agreed to let the neighbor and his son borrow his ATV. The neighbor had used the ATV on several other occasions and was an experienced rider; however, at some point on Saturday the neighbor was riding with his son and struck a tree. The neighbor’s son was knocked unconscious and the neighbor broke his spinal cord and became paralyzed from the waist down.
When the family returned from the beach, they were informed on the accident (which didn’t even occur on John’s property) and John visited his friend in the hospital. Within a few weeks an attorney filed suit against John for negligence in the maintenance of his ATV. The suit stated that the neighbor was an experienced rider and would not have struck the tree if the ATV was properly maintained (the ATV was a Christmas present 5 months prior).
John’s insurance company immediately informed him of the clause which specifically excluded motorcycles, scooters, 4-wheelers and ATVs or any kind.
It has taken almost 18 months to reach a conclusion and John has liens against the equity in all his investment property, stocks and other assets, which are owned by him and his wife. The neighbor has begun proceedings to seize the property in order to satisfy the judgments. Not only has John lost the equity of his real estate, he has spent more than $125,000 defending the case.
The bright spot is that John’s personal residence is held in a Land Trust for his children. The family’s home is owned free and clear with no mortgages or liabilities and is the family’s most valuable single asset. The liability of the judgment has not attached to the home. Since the home is held in trust for the benefit is their children, it is no longer titled to John and his wife and may not be seized to satisfy any judgments.
John and I spoke at several REIA meetings over the past few years about the need for him to place the rest of his property in trust. This could have significantly impacted the neighbor’s ability to receive any satisfaction to the judgment, while John could have maintained control and tax benefit from the mortgages on the properties.
Greg@WeBuyHouses.ME
We Buy Houses Internet Trust
Asset Investment Trust
112 S. Main St
Clover, SC 29710
877-567-2513 (Ext 101)
Topics: Investment, Money, Real Estate, The Economy | No Comments »
Let’s hope!
By George and Cheryl | December 27, 2008
For all of you who are worried about the economy, I have decided to review a little history of the US.
From 1890 and 1930 there were four major economic downturns. Of these downturns only one made the name of the “Great Depression!” It started shortly after the stock market crash of 1929 and lasted for more than ten years. Unemployment well into the downturn reached 30%. We are at 6.7% unemployment. This figure may not be calculated the same as in the 30s, but it is pretty easy to see that we don’t have one in three workers without a job.
Looking at the history between 1890 and 1940, what was the big difference between the earlier crashes and lasted about 3 years each and the “Great Depression?” By far and away the biggest difference was the United States government. They tried to fix the problem with the wrong solutions, convinced the public to stay the course, and created misery. The only way we finally got out of the quagmire was WWII. We shipped millions of men both East and West and increased manufacturing of weapons.
Let’s hope that our government entities at all levels refrain from repeating the past failures. WHO knows?
Topics: Money, The Economy | No Comments »
Here we go again.
By George and Cheryl | September 23, 2008
As Congress sits around throwing accusations, people are being hurt. The only thing that I see that could be worse is that Congress does something about the economy. I was watching our Phoenix market begin the turn around. Sales were increasing, inventories were beginning to decline and BOOM! The rug gets pulled out from the buyer’s plans with the dramatic changes in seller participation.
The lower priced properties are the most important sector of the housing market. Putting people in properties with monthly payments at or below rent payments is a winning program. The average rent in Phoenix is over $800 per month. Moving into a $100,000 home makes both social and economical sense. But NO! These folks must have at least $3,500 additional money sitting in the bank for 90 days or borrowing only from family members. Remember, there are significant costs involved with moving in.
This change is only putting a band-aid where there is no cut. The band-aid is cutting off economic blood flow to the real estate market body. Of course Congress could do much more to really trash the economy. There were four significant economic downturns between 1890 - 1929. The downturns rebounded quickly and the country was stronger. In the early 1930s, Congress did the opposite of what should have been done, And the whole world felt the pain. We could still be in that depression if we hadn’t put our men to work on the battlefield. War is definitely the worst way to manage economic down turns.
Let’s put the seller and other assistance programs back in our real estate market.
Topics: Investment, Money, Real Estate, The Economy | No Comments »
The short sale is anything but short!
By George and Cheryl | September 17, 2008
The news is reporting home values have declined by 27%. This number changes from month to month, but regardless of the percentage, in almost every neighborhood, Home values are below the high spike of 2006. For you who expect to live in your homes for at least five more years, this housing price fluctuation has very little to do with your life. For those who want to purchase a home, it is almost like after Christmas shopping. Unfortunately many folks who must sell their homes are SOL. Many of these folks have mortgages that are higher than the present value of the home. One way out while avoiding foreclosure is a “Short-Sale’”
I have really been discouraged with the short sale process. (Selling a home below the mortgage value) It seems like lenders are unwilling to do what is necessary to get a sale done. Many banks seem to think it a privilege to buy their vacant home and expect a buyer to wait for months for a decision. I can’t remember any of my real estate associates ever describing an easy short sale. Many short sales take months to complete with special bank generated forms and endless attempts to contact a decision maker. It is not uncommon for me to send 5 copies of personal information in a purchase contract to a bank fax or email before the banks admit they received one contract. What are these folks doing with all this personal information? And after doing 5 - 10 times the work of a normal sale, the bank expects me to cut my commissions.
The people hurt the most are never considered during all this ineptitude. A seller is not considered. Now everyone seems to think the seller just shouldn’t have purchased the property. The bankers are the real experts. They have whole departments with educated staff to evaluation properties on a professional level. The seller, it seems to me, trusted the lender to some extent. Now, he is upside down, looking at having to carry FORECLOSURE on his record. I would have expected that the lender and seller would try to partnership to minimize the loss to both. Unfortunately, it appears that redundant processes and understaffed departments slow the sale process which creates more loss for everyone.
While a file is gathering dust on a desk, the home owner’s life becomes uncertain. Some of these folks live in this home and don’t know when they can leave. Some are investors (considered a dirty word by the politically correct) who are watching their entire life savings dwindle away with an upside down situation.
The buyers are no better off. Imagine if you are trying to purchase your first home. You have a lease that ends in 45 days. What are you supposed to do? Sit on the street with all your posession until someone finally decides to look at your offer?
Only a banker, a government bureaucrat, or someone in Congress could design a system this bad!
Topics: Money, Real Estate, The Economy | No Comments »
2 million troubled borrowers avoid foreclosure
By George and Cheryl | August 29, 2008
Phil found another interesting article at CNN Money.com
The Hope Now coalition reports that it completed a record number of mortgage workouts in July - but that was outpaced by the increasing rate of foreclosures.By Les Christie, CNNMoney.com staff writer
Last Updated: August 27, 2008: 2:40 PM EDT.My Intro
NEW YORK (CNNMoney.com) — Hope Now has helped more than 2 million at-risk borrowers stay in their homes during the past 13 months, according to numbers released by the coalition on Wednesday. The alliance of mortgage servicers, counselors, and investors assembled to combat foreclosures fixed more than 192,000 problem loans during July, a one-month record that represents a 6% increase over June.
http://money.cnn.com/2008/08/26/real_estate/Hope_now_hits_two_million/index.htm?postversion=2008082714
Topics: Money, Real Estate, The Economy | No Comments »
Kids Teach Us So Much!
By George and Cheryl | June 20, 2008
A couple of weeks ago my son-in-law went out of town and my daughter was scheduled to work odd hours at her job at Starbucks.
It was a real treat, if not a very tiring event, to have our granddaughter stay with us for a couple of days. Like so many young children, she was always thinking up new games. It amazed us as at just how creative she was. She never seemed to run short of new ideas and had the energy to back them up.
The longer she stayed with us the more often we would here her say “I want my Mommy.” Then “I want my Daddy.” And finally she started saying “I want to go home!” At first I was a little taken aback! Although, my daughter has a nice home, mine is a little bigger with grass in the back yard and a park across the street. Eventually I understood that this was her way of life she missed and wanted it back. Her Mommy , her Daddy, her toys and her bed were there. It didn’t matter if she was in a bigger, better or newer place to live, she wanted “Home!”
Much of the housing problems we are just starting to overcome were caused by our wanting bigger and better and not necessarily “Our Home!”
One really great thing about Kathryn’s visit is that I got lots of really great HUGS. There is something really special about a young child’s hug.
Topics: Money, Real Estate | No Comments »
Some Buy a New Home to Bail on the Old
By Phil Putnam, Jr. | June 12, 2008
Phil send me this aarticle with the note that this has got to stop and I agree whole heartedly. The price of homes changes with the market. This is very short sighted!
Fannie Plans Rules To Avoid Practice Described as Fraud
By NICK TIMIRAOS
June 11, 2008; Page A3
Next month, Michelle Augustine plans to walk away from her four-bedroom house in a Sacramento, Calif., subdivision and let the property fall into foreclosure. But before doing so, she hopes to lock in the purchase of another home nearby.
Topics: Money, Real Estate, The Economy | No Comments »